RE: Martha Stewart and her Merrill Lynch Broker

From: Harvey Newstrom (mail@HarveyNewstrom.com)
Date: Thu Jun 05 2003 - 19:23:08 MDT

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    Lee Daniel Crocker wrote,
    > > (Harvey Newstrom <mail@HarveyNewstrom.com>):
    > > Is there something specific about these types of crimes that you think
    > > should keep the government out? Or is this just a global statement
    that
    > > you want the government out of all crime prevention?
    >
    > Just simple liberty. Is there some reason why you find it acceptable
    > for the government to interfere in what free people choose to do with
    > their own money by unanimous consent?

    No. But I don't see defrauding parties by selling them worthless stock as
    being "unanimous consent."

    In your world of self-contracting and self-policing, I would insert a
    clause into every contract I signed stating that the seller represented the
    property accurately and knows of no substantial deviations from the
    description as given. For stock purchases, the public disclosure
    statements would be referenced as the description of the product. That is
    how I would contractually protect myself from insider trading.

    In our current government system, I do not have to specify this explicitly,
    because it is already defined under contract law. Both parties must
    substantially agree on the material basis of the property to be sold. If
    the property turns out to be substantially different than both parties
    realized, the contract is unenforceable. If the property turns out to be
    substantially different than what the seller expected while the buyer knew
    this and remained silent, the contract is illegal. What is delivered to
    the buyer must match what is specified in the contract.

    --
    Harvey Newstrom, CISM, CISSP, IAM, IBMCP, GSEC
    Certified Security Manager, Professional, Assessor, Consultant, Technician
    <HarveyNewstrom.com> <Newstaff.com>
    


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